Dave Ramsey: Not ready to combine finances

I recently got engaged. Is it OK for us to go ahead and combine finances and start working on a budget before we get married?

Adam

Dear Adam,

No, it is not OK to combine finances with anyone to whom you’re not married. And by “OK,” I mean wise. I’m happy that you’ve found love, but all kinds of things can happen before the rings are slipped onto your fingers.

I’m not wishing bad things on you, but what if you spend time paying off her debt, or vice versa, and then the relationship doesn’t work out? Bringing finances into that kind of situation is just asking for trouble. You do not want to go there!

Now, all this doesn’t mean that you can’t begin working together on budgets for the future and goals for your lives. We’re talking about full disclosure to make this happen. She knows all about your income and debts, and you know about hers too. You guys need to have some serious discussions about saving, spending and debt, and get on the same page with your finances before the big day.

But no, my advice is that you each pay your own bills until after you’re married. Once that happens, there’s no “yours” and “mine” anymore. It all becomes “ours.”

Can I self-insure long term?

Dear Dave,

I just turned 57 and have been researching long-term care policies. Is there a point where you can self-insure for long-term care needs without a policy?

Peter

Dear Peter,

Mathematically, I’d say you could safely self-insure if you have the resources available to support your care in a nursing home or other facility for 25 years. Of course, if you’re married you have to think about your spouse and make sure she has enough to live on comfortably at the same time. That’s a lot of money. In my mind, it’s a large enough bill that it makes sense to transfer the risk to a long-term care insurance policy.

The simple truth is most people won’t have enough money to self-insure for that kind of thing when the time comes. If you have $20 million liquid sitting around, then you could easily set aside $2 to $3 million for long-term care and still be in great shape. But I advise virtually everyone to have good, long-term care coverage in place by age 60. For many folks, it can make the difference between living with dignity and having to depend on the government. And that’s not something I ever want to do for anything—especially not my health care!

Should I stay or go?

Dear Dave,

Page 2 of 2 - I graduated from college in May with $20,000 in student loans and have been working an hourly job on my dad’s farm until something opens up in my area. My sister is getting married soon in Mexico, and it would cost me about $2,000 to attend. Do you think I should go?

Phil

Dear Phil,

I understand about family, and I think you should be at your sister’s wedding. But on the other hand, it’s a little ridiculous to expect an hourly wage farm worker to travel to Mexico for a destination wedding.

The first thing I’d do is shop around for lower airfare. Financially speaking, that’s going to be a big chunk of this, and I’m pretty sure you can find cheaper prices. It wouldn’t hurt to ask mom and dad for a little help, either. They may even be willing to foot the bill. You’ve got a bunch of debt and not a lot of income right now. On top of it all, you’ve had this trip dropped in your lap.

But start out by telling your dad that you’re willing to try and pay for this, and ask him, too, if there’s any way you can make some extra money at your job. A family should be together to celebrate an occasion like this, and I bet he’ll be willing to help you out!

Dave Ramsey is America’s most trusted voice on money and business. He’s authored four New York Times best-selling books: “Financial Peace,” “More Than Enough,” “The Total Money Makeover” and “EntreLeadership.” The “Dave Ramsey Show” is heard by more than 5 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the Web at daveramsey.com.